Australia’s Beach Energy (BPT.AX) said on Thursday it would buy gas assets from top energy retailer Origin Energy Ltd (ORG.AX) for $1.25 billion in a deal that will more than double the oil and gas producer’s output.
Origin said proceeds from the sale of gas its assets, dubbed Lattice Energy, would be used to reduce its adjusted net debt to below A$7 billion ($5.5 billion) by June 30, 2018.
“We have delivered on our commitment to divest Lattice Energy consistent with our plan to simplify the Origin business, reduce debt and improve returns to shareholders,” Origin Chief Executive Frank Calabria said in a statement.
Beach said it would fund the acquisition through a A$301 million entitlement offer to shareholders and new debt facilities.
The company increased its fiscal 2018 output guidance by about 150 percent to 25 million to 27 million barrels of oil equivalent (mmboe) and said its largest shareholder Seven Group Holdings (SVW.AX) was “strongly supportive” of the deal.
Origin said it had gained access to a significant portion of Lattice Energy’s future east coast gas production under long-term supply agreements to help its domestic business.
Source: Reuters
